Consistent GDP growth enthuses India Inc

“How many Indians are really affected by the so called blistering growth of the Indian economy? I only know that a majority continue to suffer. Roughly 400 million people cannot read or write and 300 million are below poverty line; so, what are we talking about?

“Indian pharmaceutical sector is merely 1% of the world pharmaceutical market. It has grown rapidly, but this growth has come from overseas and not the domestic market, where we have faced price controls and government’s step motherly treatment.”

Ankineedu Maganti

Director, Soma Enterprise Ltd, an infrastructure development company focused on roads:

“It has been a positive year for all sectors including ours. The future would largely depend on infrastructure and the investment in this sector must continue. A whole lot of projects are now being implemented in the roads sector. There is a clear, well-defined growth in the roads sector for the next five-six years.”

Adi Godrej

Chairman, Godrej Group:

“A consistent rate of 9%-plus GDP growth is like a tonic for India. It will lead to a stronger sense of confidence, ‘can do’ attitude and global interest and respect. Today, India ranks as one of the most important economies in the world. We, Indians, should guard against complacency and arrogance and should resolve to ensure a steady 10%-plus rate of growth in the years to come.”

Shekhar Chaudhuri

Director of Indian Institute of Management, Calcutta:

“The Indian economy is growing at a rapid pace. The implications are that there will be huge increase in demand for management education.”

C.B. Navalkar

Chief financial officer, Shoppers’ Stop Ltd:

“I think it should be difficult (to sustain) and 7% will be okay... To some extent it will raise inflation and the government will try to restrict inflation by raising interest rates and other measures that would restrict the growth from 9.2% to 7%. The 9.4 % growth means good revenues and margins for us as people tend to spend more in shops... Ultimately, the money has to flow through individuals. Last year, our same (existing) stores growth was 21% and all of that is because of the strong economy.

Arvind Parekh

Chief executive officer, corporate strategy and finance, Omaxe Ltd:

“I think the growth need not be sustainable. Interest rates have gone up. This will have an impact on investments. Growth will be affected by this because the rates are not likely to come down. Inflation will also have its impact on growth. However, inflation may come down marginally to 5-5.5%.”

“In spite of these two factors, we could have achieved 9.4% growth had it not been for the infrastructure bottlenecks. Lack of infrastructure will impact growth and we will not be able to sustain this growth it unless the infrastructure bottlenecks are removed.”

K.C. Chakrabarthy

CMD, Indian Bank:

“Since penetration of banks is very low in India, the financial services sector will continue to grow fast as the economy expands and generates even more demand for financial business. The government’s emphasis on financial inclusion will complement that.”

R. Seshasayee

Managing director, Ashok Leyland Ltd:

“Private enterprise is driving growth. Fundamentally, private enterprise is growing strong, partly because of the external orientation too. Interest rates have had a dampening impact on some sectors. But I see revival in some sectors including commercial sector. I don’t think I’ll take a pessimistic view. It’s a virtuous cycle driven by robust savings and investments. Growth will sustain subject to interest rates not going up.

“That issue (of commodity prices going up) is going to be an issue to deal with. I see no new capacity coming up for another couple of years. We’ll see more of productivity efficiencies improving to counter the rising prices.”

Rajeev Malik

Economist, JP Morgan Chase Bank:

“Almost the entire difference between the actual outcome of GDP growth and its advance estimate can be explained by the upward revision in industry’s output.”

Kiran Mazumdar Shaw

Chairman & managing director, Biocon Ltd:

“The biotech sector, which has been growing at a 35%-plus rate over the last few years, will see an added boost coming in from the record 9.4% growth of the Indian economy.

“The trickle-down effect will come in the form of greater investments into the sector and mostly this will come into the biofuels and agri-biotech sectors, who will be the biggest beneficiaries of a booming economy.

“The cost plus skill-based advantage that Indian industry offers will translate into Indian biotech and pharma companies becoming a natural choice for drug development and pharma services and a booming economy increases investment flow into these sectors. So, I see a dual advantage”.

Kiran Karnik

President, Nasscom:

“The figure of 9.4% growth in our economy is great news and gives a strong signal in terms of improving productivity by increasing the contribution from services. But agriculture continues to be far too low in terms in growth and is a cause for worry because while it does not affect overall growth, it does impact around 60% of our people. Something substantial needs to be done for the rural economy such as linking it with the modern economy. With services growing at 12-13%, a link should be moving more people from rural areas to services and manufacturing. Besides, there is a need for a strong cold chain that will enable that agricultural produce reaches the market quickly and is not wasted. This can be done with the use of technology and logistics.